Nigeria is reported to have secured a landmark victory against Process and Industrial Developments (P&ID) in its effort to reverse the $9.6 billion judgment awarded against the country.
The judgment was delivered Thursday, by Ross Cranston, a judge of the Business and Property Courts of England and Wales, who granted Nigeria’s application for an extension of time and relief from sanctions.
The $9.6 billion arbitration commenced against Nigeria’s Ministry of Petroleum by the P&ID with which the Ministry signed a Definite Agreement dated January 11, 2010, for Accelerated Gas Development in OML 123 and 67 for a period of 20 years.
A court document revealed that P&ID has a history of business dealings in Nigeria. According to reports, the document is a First Witness Statement by the Chairman of P&ID, Michael Quinn, filed before the arbitration tribunal. The document gave a detailed background to the conception and negotiation for the gas contract involving top representatives of key government agencies in the oil and gas industry including the Nigerian National Petroleum Corporation (NNPC), the Department of Petroleum Resources (DPR), and the National Petroleum Investments Management Services (NAPIMS).
Addax Petroleum, an international oil company and joint venture partner to the NNPC also played a major role in the contract negotiations, as it was meant to supply P&ID the gas that was required to run the failed gas processing facility from its oil field.
During a media briefing last Thursday, the Minister of information and Culture, Lai Mohammed, said, “Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.”
And, according to the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, the conception, signing and execution of the contract to supply gas did not involve the IOC’s or NNPC.
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, disclosed that there was no evidence in the Central Bank’s records that the contractor invested about $40 million in the failed project. “We have gone through our records, we don’t have any information to show this company brought in one cent into this country,” he said.
But, according to Quinn, the controversial contract was conceived during the administration of the late former President Musa Ya’Adua who also doubled as the Minister of Petroleum back then.
“P&ID‘s contract with the Federal Government started in 2010 when the then-President Umaru Musa Yar’Adua authorised partnerships with private companies to develop the nation’s energy infrastructure in order to fix the power problem in Nigeria. P&ID signed an agreement with the Ministry of Petroleum Resources in January 2010.” – Nairametrics.
Quinn said P&ID wrote a formal proposal to President Yar’Adua on August 7, 2008, for the implementation of the project after which the company was invited by the president, who then directed them to make their presentation before the Minister of State at the Ministry of Petroleum Resources. P&ID made the presentation to the Ministry of Petroleum Resources in October 2008, according to Mr Quinn.
Quinn also mentioned that in early 2009, Rilwan Lukman who was reappointed as the Minister of Petroleum Resources on December 18, 2008, directed that P&ID’s proposal be further examined by the government.
On February 24, 2009, P&ID was reportedly invited by the Special Technical Adviser to the Minister, Taofiq Tijani, to make another presentation to the Minister for Petroleum Resources after which several top-level meetings were held involving the Ministry, NNPC, DPR, NAPIMS and Addax Petroleum to come with the gas sales and purchase agreement, he further disclosed.
Quinn said on January 11, 2010, he executed the GSPA on behalf of P&ID with Lukman who represented the Nigerian government.
Vanguard reported that the setback to the contract, which may have laid the foundation for the dispute and arbitration, was a call Quinn received from Debo Spaine of Addax Petroleum in the last week of June in 2012, during which Spaine informed Quinn that Addax’s headquarters in Switzerland had unilaterally decided to withdraw their cooperation and wished to “undertake the development of the NAG [Non-Associated Gas] themselves”.
Quinn said he wrote to Goodluck Jonathan who was the newly-elected President at the time, to solicit his support on February 10, 2012. He, however, did not disclose what Jonthan said to him.
Reports have it that a similar letter was also written on May 2012 to Diezani Alison-Madueke who was the petroleum minister at the time.
P&ID eventually filed a lawsuit against Nigeria in 2012 after all attempts to negotiate a deal with the Government failed. A tribunal was then organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between the parties.
The tribunal ruled that Nigeria was liable for $6.6 billion in damages, and proclaimed a final award of $6.6 billion with 7 percent interest per annum, calculated from March 2013, against the Nigerian Government. This has now increased to over $9 billion with interest.
On July 2015, liability hearings began as the Buhari Administration was coming into office. Meanwhile, both principal players, Rilwanu Lukman and Michael Quinn, the two signatories to the contract had died. Lukman died in 2014, while Quinn died of cancer in 2015.
A Nigerian newspaper was said to have published a list of unanswered questions about the firm: “where are its offices? How many people does it employ? How did such a tiny company win such a large concession?” Unfortunately, Quinn had already passed and the questions were left hanging.
A close examination of Quinn’s career, drawn from public records, including leaked documents and interviews with friends and former associates, revealed that P&ID wasn’t the only project Quinn was involved in that ended in disappointment, lawsuits, and corruption allegations. His contract with the Nigerian government just happened to be his biggest scam that was meant to yield the highest amount of money for him.
Following the deaths of the two key players, it is unclear who was pursuing the liability hearings in January 2017.
According to Bloomberg, “in the summer of 2018, a man who’d worked for Quinn contacted Joseph Pizzurro, a veteran New York lawyer hired by Nigeria to lead its defense in the U.S. The caller wanted to talk about the P&ID case.
“I don’t think it’s genuine,” the man said, according to an account he gave Bloomberg Businessweek on condition of anonymity because he feared for his safety. He told Pizzurro that Quinn had conspired with officials to profit from government projects that were doomed from the start and that P&ID was one of at least three such lawsuits involving Quinn. The caller couldn’t provide enough evidence to substantiate his claims, though, and he didn’t contact Pizzurro again.”
On May 21, 2019, the company filed for approval from courts in the US and the UK to enforce the award after the Nigerian Government failed to obey the order by the tribunal.
“A hedge fund managed by VR Capital Group took a large stake (25%) in P&ID. With the backing of the hedge fund and Lismore Capital Ltd, P&ID hired lobbyists, lawyers, and a public-relations firm late last year to fight the case.” – Nairametrics.
In August 2020, P&ID won a ruling from a UK based judge that gives the company the right to seize Nigerian assets. Quinn’s company thought they had won the victory, not until it caused an outcry in Nigeria which has now secured it an extension of time and relief from sanctions.
The country’s finance minister said at a press conference that the size of the award, which has risen above $9 billion with interest, meant all Nigerians would pay a price. The chair of the central bank said that the case has affected monetary policy. Toward the end of the month, the justice ministry opened a corruption investigation into how the gas plant deal was struck.
‘The contract was designed to fail right from inception,’ attorney general Abubakar Malami told reporters. If the Nigerian government is right, P&ID was an audacious scheme that had made unwitting accomplices of legal professionals, financial institutions, and politicians around the world.” – Pageone.
While the Thursday judgment by Ross Cranston may be worth celebrating, Nigerians are hopeful that justice will prevail at the long run.